Legislation to Change CHRB Membership Introduced

Legislation that would change the current membership of the commission that oversees horse racing in California and require other "ethics reform" was introduced by State Senator Leland Yee June 26.

Yee, a San Francisco Democrat whose district includes Bay Meadows, contends the California Horse Racing Board has conflict of interest issues and taken questionable steps on contracts and other decisions. Yee became a fierce critic of the board following its decision in March to deny a waiver to Bay Meadows -- now being reconsidered -- of a mandate requiring all major Thoroughbred tracks in the state convert to synthetic racing surfaces by Jan. 1.

The senator had a chance to air his grievances at a California Senate Governmental Organization Committee hearing June 13. His legislation addresses one of his major areas of concern -- that five of the seven commissioners are licensed Thoroughbred owners.

"The California Horse Racing Board is tasked with serving the public interest, not the interests of one aspect of the industry over another," said Yee in a statement. "The CHRB has seriously lacked appropriate balance in the membership. It is simply unacceptable for a public board to be so dominated by interests of one segment of the industry they are charged with regulating."

Under Senate Bill 863, no more than three CHRB members could be licensees in the horse racing industry -- one whose activity is predominantly in the northern half of the state, one predominantly from the south and one whose interest is in nighttime racing -- Quarter Horse or Standardbred. SB 863 also requires the CHRB to develop and adopt regulations regarding board member conflicts of interest and a code of ethics prior to July 1, 2008, and requires the board to receive annual ethics training.

The board includes three high-profile owners and breeders in California: vice chairman John Harris and commissioners Jerry Moss and John Amerman.

Under current horse racing law, a person is prohibited from serving on the commission if that individual, a spouse or dependent child holds a financial interest in any track; or a financial interest or position of management with any business entity that conducts pari-mutuel horse racing; or a financial interest in a management or concession contract with any business entity that conducts pari-mutuel horse racing.

Current horseracing law encourages participation on the board by horse owners. Section 19424.5 states: "In order to permit the full participation of horsemen and horsewomen who may be appointed to the board, the Legislature declares that the appointment of such persons is intended to represent and further the interests of horse owners and breeders pursuant to Section 19401, and that such representation and furtherance will ultimately serve the public interest. Accordingly the Legislature finds racehorse owners and breeders are tantamount to and constitute the public generally within the meaning of Section 87103 of the Government Code."

Board members are paid $100 for each day spent in attendance at meetings or fulfilling other duties.

The CHRB, along with other agencies in the state, are likely to continue operating on the current year's budget as of July 1 because the 2007-08 state spending plan will not be ready in time, according to Adam Keigwin, a spokesman for Yee. A senate sub-committee has zeroed out the CHRB budget for the coming year based on Yee's recommendation and the agency's $10.7 million request must be negotiated with conferees from both legislative houses and Gov. Arnold Schwarzenegger. Keigwin said CHRB compliance with SB 863 ethics provisions would be a good first step toward regaining legislative confidence.

The CHRB set a teleconference of the board July 3 to take action on a one-year waiver of its synthetic track mandate to allow Bay Meadows to race in 2008. The board, by a 5-0 polling, already agreed to the exemption in principle at its board meeting June 19 but could not take official action because of a legal technicality.